Barrowfen Properties Limited and another (Respondents) v Stevens & Bolton LLP (Appellant) No 2

Case summary

Case ID

UKSC/2025/0125

Parties

Appellant(s)

Stevens & Bolton LLP

Respondent(s)

Barrowfen Properties Limited

Issue

(i) In a loss of chance claim, should the benefit received by the claimant reduce the damages that they are owed by the full amount of the benefit or should the benefit be discounted by the probability of the loss of chance occurring? (ii) Can the facts of the present case be distinguished from the case of Hartle v Laceys?

Facts

These appeals challenge separate points of law stemming from the same facts. Barrowfen Properties Limited (“Barrowfen”) is a property investment company. Mr Girish Patel (“Mr Patel”) was a former director of Barrowfen. Stevens & Bolton LLP (“S&B”) is firm of solicitors that acted for both Barrowfen and Mr Patel personally. Barrowfen’s principal asset is a commercial property in Tooting, London (the “Property”). Mr Patel, in breach of his directors’ duties, sought to obtain control over Barrowfen in 2013 – 2015 from his family who also owned Barrowfen. This occurred through various means including challenging the appointment of any other directors. Mr Patel then forced Barrowfen into administration by obtaining and then enforcing a debt which Barrowfen owed to a separate company, using a further company Mr Patel controlled. S&B were held to negligent in failing to address the conflicts of interest present in advising Barrowfen and Mr Patel. Prior to the dispute between Mr Patel’s family, Barrowfen made a planning permission application to develop the Property. This involved constructing a hotel, a supermarket, retail units and student accommodation, which was eventually approved (the “Amended Original Development Scheme”). The Amended Original Development Scheme was ready to commence in January 2015, however, as a consequence of the wrongdoing above, construction could not begin. This delay meant that Barrowfen lost the chance to make rental profits from the Amended Development Scheme during this period of delay. Control of Barrowfen was only returned from the administrators to the other shareholders in September 2016. At this time, the plans for the Amended Original Development were off track. The anchor tenant for the development had pulled out and the costs of implementing the Amended Original Development Scheme in its current form had risen significantly such that it was no longer viable. Barrowfen decided to adapt and pursue a different, larger development of the Property (the “Revised Development Scheme”) which required separate planning permission. Planning permission for the Revised Development Scheme received on 10 August 2018. Barrowfen brought a claim against Mr Patel and S&B for, primarily, equitable compensation and breach of contract and professional negligence, respectively. The High Court determined that there was a 92% chance that the Amended Original Development Scheme would have commenced by January 2015 (60% chance) or by April 2016 (32% chance (80% of 40%)) if the wrongdoing had not occurred. The lost chance of the rental profits from those periods were assessed. Broadly, the damages considered owed to Barrowfen were calculated by multiplying: (p) the probability of the date the Amended Original Development Scheme would have started collecting rental profits by (a) the total rental profits that would have been earned from that start date. An important element of these appeals is that Barrowfen has potentially received a benefit from carrying out the alternative Revised Development Scheme in the form of a higher ‘developer’s profit’ of £2,508,182 compared to the Amended Original Development Scheme (the “Developer’s Profit”). The Betterment Appeal The High Court and the Court of Appeal held that Barrowfen had to give credit for the Developer’s Profit, reducing the amount of damages owed by S&B and Mr Patel. Barrowfen now appeals to the Supreme Court arguing that the Court of Appeal misapplied the law on ‘betterment’ which allows for an ancillary benefit received from a breach to be ignored in certain circumstances. Further, as Barrowfen was found by the High Court to have no intention of selling the property, they argue it is wrong for the ‘Developer’s Profit’ (which assumes a sale) to be credited. The Hartle v Laceys Appeal S&B’s appeal focuses on the how the Developer’s Profit should reduce the damages it owes. The High Court and Court of Appeal held that the benefit should be reduced (discounted) by the relevant loss of chance percentage. S&B now appeals to the Supreme Court arguing that it should be subtracted outright which would reduce the damages they owe to Barrowfen by a greater amount. This turns on whether the Court of Appeal decision in Hartle v Laceys [1999] is correct or if it can be distinguished.

Date of issue

22 July 2025

Case origin

PTA

Linked cases

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